Why Every Company Should Have an Employee Handbook – Compliance

Why Every Company Should Have an Employee Handbook

Focusing on compliance, this blog is the last in a three part series. These articles are developed from the ComplianceHR whitepaper: Seven+ Reasons Why Every Organization Should Have an Employee Handbook. If you are interested in the whitepaper, download it here.

Navigating Employee Compliance: Handbook

The world of work has never been more difficult, or risky, for employers in the United States. Since March 12, 2020, there have been 5,659 lawsuits


(including 646 class actions) filed against employers. These law suits are due to alleged labor and employment violations related to the coronavirus, according to Littler. This is a niche type of lawsuit—imagine the total case sum across all potential employment violations.

In addition to unprecedented talent supply chain challenges, there is a never-ending flood of new federal, state, and local employment laws. Additionally, evolving regulatory guidelines that employers must absorb and apply in order to be compliant.

A well-designed and up-to-date employee handbook should be a top priority for any organization that wants to attract and retain talent while also mitigating the substantial risks that come with being an employer.


Ensure Compliance with All Applicable Laws

In the United States, employees have many legal rights and protections. As a result, employers must be very careful to fulfill their obligations and not create additional legal exposure for the business. An up-to-date employee handbook can help achieve that goal. No matter what jurisdiction you do business in–or how many employees you have–your organization will be subject to federal, state, and even local employment laws. Your employee handbook not only communicates these entitlements and obligations to employees, but also serves the useful purpose of demonstrating that your organization intends to be compliant with these regulations. A well-designed and up-to-date employee manual minimizes liability risk due to clearly communicated and regulatory-compliant employment policies. It also contains critical protective language that helps minimize common employment litigation and threats, if they should arise.

Many organizations struggle to keep up with the near-constant stream of new or revised federal, state, and local employment regulations. This is particularly difficult for employers with a multi-state or national business footprint. Fortunately, solutions like ComplianceHR’s PolicySmart are available to provide real-time updates and compliant policy templates.

Mitigate the Risk of Employee Claims and Lawsuits

Compliance Employee HandbookMost organizations will face a lawsuit or legal challenge from a current or former employee at some point in their history. Employee handbooks can be extremely useful documents to have in place when employers are forced to defend themselves from a wrongful termination, wage and hour, or other common employee claims. The risk of workplace grievances or lawsuits is significantly reduced with a well-written employee handbook that has been kept up-to- date and consistently used. How? Some organizations operate with unspoken and unwritten policies that can often create a situation where employees believe they have been treated unequally or unfairly. Your handbook reduces the risk of employee discrimination and other lawsuits by defining, communicating and helping your managers to apply guidelines that are applicable to all your employees.

A thorough and compliant employee handbook demonstrates that the organization exercised “reasonable care” towards its employees. Furthermore, the employee’s signed acknowledgement page will show that the employee was provided with the handbook and had an opportunity to familiarize themselves with the organization’s policies, a chance to ask questions, and agreed to follow the terms and conditions of employment set forth by the organization.

It is very common for employment law attorneys to ask for a copy of your employee handbook at the onset of any employment related claim. If your organization does not have an employee handbook, it is much more challenging to defend your company because smart opposing counsel will use the absence of a handbook to also prove the absence of any consistent policies or procedure to guide how employees are treated.

Consistency Is Key

To be effective your employee handbook should accurately communicate your organization’s policies regarding employment, conduct and behavior, compensation and other important policies and procedures.
However, there is one big caveat: No employee policy will be effective if it is not universally adopted, or consistently followed, across the organization!

As mentioned earlier, a clear and consistently communicated handbook helps ensure that your company policies are followed. To reinforce this good behavior, many organizations ask employees and managers to acknowledge their receipt and understanding of the employee handbook.

By educating employees during onboarding they help ensure that employees use the employee handbook as a self-service tool, and can safely rely on to answer common questions or provide further guidance. By ensuring that managers also refer to the handbook when answering questions or making decisions regarding company policies, company leaders and HR teams help ensure their answers and actions are consistent with company policies and best practices, and that employees are treated equally and fairly.

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About ComplianceHR

ComplianceHR offers the only on-demand, intelligent suite of compliance applications focused on helping companies address the ever-changing federal and state employment law requirements on many common HR topics such as minimum wage, overtime, independent contracting, and more.

We provide employers of all industries, sizes, and locations with solutions that empower employers to handle complex compliance issues with less time, cost, and complexity than traditional methods. The Navigator Suite simplifies employment law compliance, allowing you to streamline your compliance workflow in only a few simple clicks.

One of our most popular applications, PolicySmart, is an intuitive handbook compliance tool that provides employers with national and state specific templates, a unique compliance timeline, and so much more. Fueled by the subject matter expertise of Littler, the world’s largest employment law firm, PolicySmart allows users to easily create and maintain legally compliant handbooks that are cost effective, up-to-date, and delivered on-demand.

If you are not already a ComplianceHR client, we welcome you to sign up for a quick intro call and product demo with one of our compliance experts. After the demo we also offer a free, 14-day trial to explore all of the Navigator Suite applications and see for yourself how they can transform your compliance practices. Register for a demonstration today.